The charred remnants of a luxury cliff-side home fell 75 feet into a lake below on Friday after Texas fire crews set the US$700,000 retreat ablaze rather than wait for it to crumble into the water as the land collapsed around it.

It took less than an hour for the fire to level the home above Lake Whitney, about 60 miles south of Fort Worth. Flames consumed exterior walls after crews spread bales of hay and fuel inside, then set it all on fire.

The ground had cracked and become unstable in recent months, and then a few days ago part of the land gave way beneath the 4,000 square foot home, leaving pieces dangling over the edge. Authorities condemned the home and the owners, Robert and Denise Webb, consented to it being burned down.

Authorities said destroying the house, part of a gated resort community, was better than waiting for it to topple into Lake Whitney.

House burns and falls off cliff in Texas. Source: AP YouTube channel

Spectators in dozens of boats witnessed the demolition from a safe distance.

The Webbs bought the home in 2012 but a few weeks ago were forced to remove their personal items and relocate. They expressed shock and sadness at losing their lake house. They have another home in Florida.

"You know, that's my life there that we're watching fall off," Robert Webb said the day before the demolition.

Geologists and inspectors had told them before they purchased the land that the property was perfectly stable "and so we bought it in good faith", Webb said.

The house, built in 2007, was to have been left to his grandchildren.

"It's really tough, that house was special and I don't even know why it was so special but it was special to me," Denise Webb said.